Most of Central African Republic's debt to Paris Club to be canceled

By Angela McDaniels

Tacoma, Wash., Sept. 15 - The Central African Republic and representatives of the Paris Club creditor countries agreed on Tuesday on a reduction of the country's debt, according to a Paris Club news release.

Paris Club creditors decided to cancel $49.2 million, which represents the group's share of the aid extended under the Heavily Indebted Poor Countries initiative.

Creditors also committed on a bilateral basis to grant additional debt relief in the amount of $6.5 million.

As a result of these agreements, the country's debt to Paris Club creditors will be reduced to $3.7 million from approximately $59.3 million.

Paris Club said the Central African Republic has committed to allocate the resources freed by this debt treatment to priority areas identified in the country's poverty-reduction strategy.

The country reached its completion point under the enhanced initiative for the Heavily Indebted Poor Countries on June 30.

The country's public external debt was estimated by the International Monetary Fund to be $1.05 billion as of the end of 2008, according to the release.

Formed in 1956, Paris Club is an informal group of creditor governments from major industrialized countries.

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